Agenda item

Consideration was given to the report of the Director of Finance which outlined the Treasury Management Review for 2018/19.

The Council was required by regulations issued under the Local Government Act 2003 to produce an annual treasury management review of activities together with the actual prudential and treasury indicators for 2018/19.  The report met the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).

During 2018/19 the minimum reporting requirements were that the full Council should receive the following reports:

·         An annual treasury strategy in advance of the year (approved 28 February 2018);

·         A mid-year (minimum) treasury update report (approved 12 December 2018); and

·         An annual review following the end of the year describing the activity compared to the strategy (this report).

The regulatory environment placed responsibility on Members for the review and scrutiny on treasury management policy and activities.  The report was therefore important as it provided details of the outturn position for treasury activities and highlighted compliance with the Council’s policies previously approved by members.

The Council confirmed that it had complied with the requirements under the Code to give prior scrutiny to all of the above treasury management reports.  The Audit Committee was charged with the scrutiny of treasury management activities in Oldham and was therefore requested to review the content of the report prior to its consideration by Cabinet and Council.  A programme of Treasury Management training had been developed in conjunction with the Link Asset Services, the Council’s Treasury Management advisors. 

During 2018/19, the Council complied with its legislative and regulatory requirements.  The key actual prudential and treasury indicators detailed the impact of capital expenditure activities during the year with comparators as outlined in the report.

The actual capital expenditure was less than the revised budget estimate for 2018/19 presented within the 2018/19 Treasury Management Strategy Report considered at the Council meeting held on 27 February 2019.  The outturn position was significantly less than the £89.658m original capital budget for 2018/19 as approved at Budget Council on 28 February 2018.  During the course of the year, the Capital Programme had seen substantial rephasing.  A number of major schemes were re-phased or re-aligned into future years to allow for either a review of the scheme or to align with revised project timelines. 

No borrowing had been undertaken during the year. This was because of the policy of self-financing which was utilised due to the uncertainty around interest rates and the availability of cash, and the Council used cash reserves rather than incur additional borrowing costs.  Other prudential and treasury indicators were outlined in the report.  The Director of Finance confirmed that the statutory borrowing limit (the Authorised Limit) had not been breached and that the financial year 2018/19 continued the challenging investment environment of previous years, namely low investment returns.

Members were provided with a briefing note which highlighted the position for 2018/19 which included compliance with statutory requirements, outturn on capital expenditure, capital finance requirements, treasury position and investment portfolio.  The finance team had exceeded the target set for themselves in relation to a rate of return on investments made.

Members commented on the good performance of the Finance Team with regard to treasury management activities and also congratulated them on the performance on the Accounts and recorded their thanks to the officers for a job well done.

RESOLVED that:

1.         The Actual 2018/19 prudential and treasury indicators presented in this report be approved.

2.         The Annual Treasury Management Review Report for 2018/19 be approved.

3.         The Treasury Management Review Report for 2018/19 be commended to Cabinet.